H1 2019 Activity Sustained Sales Growth Combined with Step-up in - - PowerPoint PPT Presentation

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H1 2019 Activity Sustained Sales Growth Combined with Step-up in - - PowerPoint PPT Presentation

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H1 2019 Activity Sustained Sales Growth Combined with Step-up in Margin Paris, 30 July 2019 Agenda Group transformation accelerating and delivering Sustained sales growth Step-up in margin Very active business development

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H1 2019 Activity

Sustained Sales Growth Combined with Step-up in Margin

Paris, 30 July 2019

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2

Agenda

  • Group transformation accelerating and delivering
  • Sustained sales growth
  • Step-up in margin
  • Very active business development
  • 2019 outlook confirmed

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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3

Group Transformation Accelerating and Delivering

Benoît Potier

Chairman & Chief Executive Officer

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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4

Very Solid Performance in H1 2019

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

(1) Group and G&S sales growth in H1 19 (2) Operating Income Recurring on Sales; including +10bps from IFRS16; no energy impact in H1 2019

Balance Sheet Operations

+70bps(2)

Step-up in margin

+7.8%

Sustained sales growth(1)

+12%(3)

Recurring Net Profit growth

+30bps(4)

ROCE ramping up

71%(5)

Improved gearing at

(3) Excluding exceptional items: Fujian in 2019 and financial gain in 2018 (4) Excluding Fujian exceptional impact in H1 2019; see reconciliation in appendix of Activity Report (5) Compared to June 2018 and adjusted for dividend seasonality; excluding lease liabilities (IFRS16)

+4.9%

Comparable(1)

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Healthcare Electronics Industrial Merchant Large Industries

+5.4% +2.6% +13.5% +6.0%

0% 1% 2% 3% 4% 5% 6%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 5 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

G&S Comparable Sales Growth Growth per World Business Lines

Sustained Sales Growth from all WBLs

+5.0%

H1 2019

2017 2018 2019

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6

Step-up in Margin

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

Portfolio Management Price/Mix Efficiencies +70bps OIR margin

(1)

(1) Operating Income Recurring on Sales; including +10bps from IFRS16; no energy impact in H1 2019

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7 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

Very Active Investment Decisions

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8

H2 16 H1 17 H2 17 H1 18 H2 18 H1 19

€1.8bn

Financial Investments Industrial Investments

Including Tech Air

Split by Geography (excluding Tech Air)

44% 17% 36% Americas Asia Europe AME

Investment Decisions - €bn H1 2019

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8

Group Transformation Accelerating and Delivering

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

  • High level of signing
  • Portfolio management
  • Deployment of

transformation projects

  • S&P outlook revised

to Positive

  • Investment alignment
  • Enhanced innovation

A

ASSETS

C

CUSTOMERS

E

ECOSYSTEMS

Climate Objectives

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9

2019 H1 Performance

Fabienne Lecorvaisier

Executive Vice President & Chief Financial Officer

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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Highlights

  • Sustained comparable sales growth of +5% in Q2
  • Step-up in OIR margin
  • Solid cash flow
  • Increased ROCE
  • Very active business development

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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Sustained Sales Growth

11 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

  • +2.5% FX Impact in H1
  • Neutral Energy Impact in H1
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Robust Markets Through H2 2019

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

 

Markets

Chemicals Oil & gas Steel Metal Fab. Construction Energy Food & Pharma Techno & Research Integrated Circuit

    

IM LI EL

 

Outlook H2 2019

  • Strong Carrier Gases & Advanced Materials
  • Slightly lower E&I sales growth
  • Contrasted Chemicals
  • High demand from Oil & Gas in Europe
  • Active projects signing

 

  • Softer markets due to low investments in the

short-term

  • Solid consumption-related sectors
  • Specific dynamic in China
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Confirmed Growth Levers in Q2

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

Main Geographies contributing WBLs

+2%

Industrial Merchant

+6%

Large Industries Healthcare

+7% +13%

Electronics Asia, Europe, Middle East Asia, Europe G&S comparable sales growth Asia, Americas Europe, Americas

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Very Solid Level of Base Business

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health (1) Comparable growth based on 2016 adjusted sales

G&S quarterly growth analysis Tech Air acquisition

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Q2 - Steady Americas and Strong Europe

Sales

H1 2019

€4,217m

Sales

H1 2019

€3,611m

Americas – Solid HC, Pricing in IM Europe – All WBLs Driving Growth

15 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

G&S comparable sales growth

  • high H2 for refining in Benelux
  • Ramp-Ups in Turkey and Kazakhstan
  • high pricing
  • positive underlying volumes
  • high organic growth in HHC

 LI  IM  HC  EL  LI  IM  HC

  • high O2 volumes
  • H2 Start-Up in Mexico
  • strong pricing
  • contrasted end markets
  • solid U.S.
  • strong HHC in South America
  • still solid E&I
  • high Carrier Gases
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Q2 – High Growth in Asia, Dynamic IM in AME

Asia – Strong LI and EL

  • O2 Ramp-Ups in China for Chemicals
  • strong cylinder volumes in China
  • solid growth in South East Asia
  • strong growth across the region
  • >+15% in Carrier Gases and Advanced

Materials

  • high E&I

AME – Major LI Turnaround

  • major turnaround in South Africa
  • continuous high growth in Middle-East,

Egypt and India

Sales

H1 2019

€2,405m

Sales

H1 2019

€303m

16 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

G&S comparable sales growth

 LI  IM  EL  LI  IM

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Q2 - Resilient IM, High Growth in LI

Sales

H1 2019

€2,904m

Sales

H1 2019

€4,827m

Large Industries – High contribution from Ramp-Ups

 Strong Oil & Gas in Benelux with high

H2 volumes

 Chemicals driven by Ramp-ups in China  Softer Metals in Europe

Industrial Merchant – Solid Performance

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

G&S comparable sales growth

 Stronger pricing at +4.1%  Contrasted end markets:

  • Strong Food & Pharma
  • Flat automotive
  • Construction and Metal Fab

. lower in the U.S. . solid in Europe and Canada . strong in China

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Q2 - Strong HC, High Growth in EL

Healthcare – Organic Growth

 Strong HHC across all of Europe,

diabetes therapy in Nordics

 Solid Medical Gases in Americas

Electronics – High Carrier Gases & Advanced Materials

 >+13% growth in Carrier Gases;

2 Start-Ups

 Double digit growth in Advanced

Materials

 Solid sales to Integrated Circuit

Memory market

 Strong FPD in China

Sales

H1 2019

Sales

H1 2019

€984m €1,821m

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

G&S comparable sales growth

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+70 bps OIR Margin improvement

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

H1 2019

  • including +10bps

from IFRS 16

  • no Energy impact
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20 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

Pro-active Management of Pricing and Product Mix

  • Pricing aligned with cost inflation
  • Focus of sales teams
  • Leveraging competitive position on

Helium market

  • Priority to added value services and

products Gas applications in China Inteliox cylinders in US

IM pricing momentum

2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2018 2019

+0.5% +1.2% +2.1% +3.3%

+4.1%

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Continuous improvement

14k employees trained

  • ut of 30k targeted

Extended procurement scope Investment in efficiencies

+63% vs. H1 2018

21 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

€197m Delivered Efficiencies in H1 19

Transformation

  • Closing of PG filling centers, logistics
  • Leveraging on 4 SIO centers
  • Business Support Centers extended Asia & Europe
  • Mutualization of WBLs technical teams Europe, Japan
  • 3,000 Airgas trucks with on-board computers
  • Big data from LI production to IM logistics Italy
  • Argon production & supply chain

US, Canada, France, Vietnam

  • Optimization of technicians’ time HHC Europe

Examples Accelerated momentum Optimization

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22 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

Continuous Portfolio Management

Airgas

  • Refrigerant activity
  • Onsite safety services
  • Ophthalmic protection

equipment

  • 1 active project

China

  • Fujian assets
  • IM JV swap

Europe

  • Intega EL E&I
  • 3 active projects
  • Focus on core business
  • Densification of operations:

swap, bolt-on acquisitions

  • Accretive impact on margin
  • Contribution to ROCE

improvement

Divestitures over last 2 years AME

  • 2 active projects
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* *

Strong Recurring Net Profit

+12.1%

* Recurring Net profit

Excluding one-offs:

  • Fujian in 2019
  • financial gain in 2018

23 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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Solid Cash Flow

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

CASH FLOW +14.8% +8.6%

  • excl. IFRS 16

Gearing

69%

(1) June 30 gearings adjusted for dividend seasonality (2) Including acquisitions, transactions with minority shareholders, net of divestitures

Gearing(1)

79%

GEARING (1)(4)

71%

(3) Including share purchases and capital increases (4) Net debt excluding lease commitments (IFRS 16)

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ROCE Improvement

30 July 2019

6% 8% 10%

  • Dec. 15
  • Dec. 16

adjusted

  • Dec. 17
  • Dec. 18
  • Jun. 19

2021/22 2021/2022 NEOS

  • bjective

>10%

Airgas acquisition

10.3% 6.9%

ROCE – After tax

(1) Excluding positive impact on 2017 net profit of non-cash one-off items (2) Excluding Fujian exceptional impact in H1 2019; see reconciliation in appendix of Activity Report

7.7%(1) 8.0% +30bps

H1 2019 Results A world leader in gases, technologies and services for Industry and Health

8.3%(2)

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Very Active Business Development

Investment Opportunities(1)

12-month portfolio

H1 2019 Investment Decisions(1) H1 2019 Start-up/Ramp-up Sales Growth Contribution

  • Well-balanced by geography
  • ~€20m average project size
  • >1/3 of projects linked to

climate objectives

  • High level of signings
  • 2 on U.S. pipeline network
  • H2 energy
  • Biomethane, Norway
  • Acquisitions:
  • Tech Air, major IM U.S. distributor
  • Medidis in HHC Netherlands
  • 5 Start-Ups in EL

in Asia

  • 1 CO2 purification plant

in the U.S., circular economy

(1) See definitions in appendix 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

H1 2018 H1 2019

€2.7bn

H1 2018 H1 2019

€1.8bn

H1 2018 H1 2019

€185m

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LI T/O

China

27 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

Confirmed Start-Ups Forecast

Pemex T/O

Mexico

Major Start-Ups Sales growth contribution - FY 2019 ~€300m

2019

Q1 Q2 Q3 Q4

LI Projects

Middle- East

EL Projects

Asia

EL Projects

Asia

Steel Project

Europe

LI Project

Argentina

EL Projects

Asia

Note: T/O = Take Over

Steady Backlog >€2bn

Yearly Sales Backlog after full Ramp-ups

€ 0.85bn

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2019 Outlook

  • Sustained sales growth
  • Step-up in margin
  • ROCE improvement
  • Very active business

development

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

“Assuming a comparable environment, Air Liquide is confident in its ability to deliver net profit growth in 2019, calculated at constant exchange rate” 2019 H1 2019

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H1 2019

Appendix

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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H1 2019 G&S Revenue Breakdown by Region

Americas

€4.2bn

Europe

€3.6bn

Asia- Pacific

€2.4bn

Large Industries Electronics Healthcare Industrial Merchant

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

€10,536m

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Americas

Q2 Gas & Services Sales: €2,148m

INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

(1)

(1) Refer to appendix for definitions (2) Excluding energy impact

(2)

  • Strong pricing +4.8%
  • Helium contributing to growth
  • Contrasted end-markets:
  • strong Food & Pharma
  • lower Construction and Metal Fab

in U.S., remaining solid in Canada

  • High O2 volumes in U.S.
  • Strong cogen in U.S. and

Canada

  • Start-up of T/O in Mexico
  • Robust Metals in Canada
  • Very solid medical gases in

the U.S. for Proximity care

  • Strong HHC in South

America

  • Very limited M&A
  • High growth in

Carrier Gases

  • Still solid E&I

Note: T/O = Take Over

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Europe

Q2 Gas & Services Sales: €1,782m

INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

(1) (2)

(1) Refer to appendix for definitions (2) Excluding energy impact

  • High H2 sales for refining in Benelux
  • Softer O2 volumes from steel

customers

  • Ramp-Ups in Turkey and Kazakhstan
  • Further accelerated pricing

at +3.8%

  • Positive underlying volumes
  • All major geographies

contributing to growth

  • High organic growth in HHC with

strong diabetes activity in Nordics

  • Very solid Hygiene
  • Limited M&A
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Asia-Pacific

Q2 Gas & Services Sales: €1,211m

INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

(1) (2)

(1) Refer to appendix for definitions (2) Excluding energy impact

  • O2 Ramp-Ups in China
  • High volumes for Chemicals
  • Strong cylinder volumes in China
  • High helium volume and price

across the region

  • Solid activity in South East Asia
  • Strong growth in China, Korea,

Singapore, Taiwan and very solid Japan

  • >+15% sales growth in Carrier Gases

and Advanced Materials

  • High E&I sales, in particular in

Singapore and China

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Industrial Merchant Pricing

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

Americas Europe Asia-Pacific Africa Middle-East

Q2 2019 H1 2019 +3.7% +5.4% +1.4% +3.5% +4.3% +4.1% +5.4% +1.5% +3.8% +4.8% TOTAL

INDUSTRIAL MERCHANT

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Q2 2019 – E&C and GM&T Activities

35 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

E&C

Sales to third parties

  • 12%

Order Intake

  • 8%

GM&T +7% +27%

Sales Order Intake

€233m €134m €83m €129m

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Steady Backlog > €2bn

See definitions in appendix 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

Dec 2016 Dec 2017 Dec 2018 Decisions Start-ups June 2019

Start-ups Decisions

Yearly Sales Backlog after full Ramp-ups

€2.1bn €2.1bn €2.2bn €2.2bn € 0.85bn

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Consolidated P&L

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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Consolidated Balance Sheet Simplified - In €m

* Including fair value of derivatives (1) Excluding lease liabilities (IFRS16) (2) Adjusted for dividend seasonality 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

(1) (1) (2)

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Cash Flow Statement

* PPE: Property, plant and equipment.

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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Impact of Currency and Energy on G&S Revenue

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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Revenue Analysis by Quarter and by Business Line

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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Revenue Analysis by Quarter and by Geography

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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G&S Revenue Growth by Quarter and by Impact

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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Investment Cycle – Definitions

  • Investment opportunities at end of the period

– Investment opportunities under consideration by the Group for decision within 12 months. – Industrial projects with investment value > €5m for Large Industries and > €3m for other business lines. – Includes asset replacements or efficiency projects. Excludes maintenance and safety.

  • Investment backlog at end of the period

– Cumulated industrial investment value of projects decided but not yet started. – Industrial projects with value > €10m, including asset replacements or efficiency projects, excluding maintenance and safety.

  • Sales backlog

– Cumulated expected sales per year generated by the current investment backlog after full ramp-up.

  • Decisions of the period

– Cumulated value of industrial and financial investment decisions. – Industrial, growth and non-growth projects including asset replacements, efficiency, maintenance and safety. – Financial decisions (acquisitions).

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

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Financing Structure

As of June 30, 2019

30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

< 1 year > 5 years Between 1 and 5 years

Net debt excluding lease commitments (IFRS) (1) Others: put options granted to minority shareholders.

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0.0 0.5 1.0 1.5 2.0 2.5 3.0 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 0.0 1.0 2.0 3.0 4.0 5.0 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Regular and Sustained Performance

4,000 8,000 12,000 16,000 20,000 24,000 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 1,000 2,000 3,000 4,000 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Revenue (in €m) EPS(2) (in €) Cashflow (in €m)

(1) Calculated according to prevailing accounting rules over 30 years. (2) Adjusted for the 2-for-1 share split in 2007, for attributions of free shares and for a factor of 0.974 reflecting the value of the rights of the capital increase completed in October 2016.

Dividend(2) (in € per share)

46 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health

CAGR over 30 years(1) +5.8% +6.9% +6.5% +8.3%

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For further information, please contact:

Investor Relations Aude Rodriguez  + 33 (0)1 40 62 57 08 Ludmilla Binet  + 33 (0)1 40 62 57 37 Muriel Légeron  + 33 (0)1 40 62 50 18 Joseph Marczely  + 1 610 263 8277 Communication Alexandra Rocca  + 33 (0)1 40 62 50 93 Annie Fournier  + 33 (0)1 40 62 51 31

www.airliquide.com Follow us on Twitter @AirLiquideGroup

L’Air Liquide S.A. Corporation for the study and application of processes developed by Georges Claude with registered capital of 2,361,913,658.50 euros Corporate Headquarters: 75, Quai d’Orsay 75321 Paris Cedex 07 Tel : +33 (0)1 40 62 55 55 RCS Paris 552 096 281

A world leader in gases, technologies and services for Industry and Health 30 July 2019 H1 2019 Results